Out of the loop is the original title of a New York Times article discussing how difficult it is for women entrepreneurs to get funded, or generally to get into the management ranks in business. A title that backfires … but you’ll have to wait to see why.

The first case discussed @ the NYT is Crimson Hexagon, a start-up founded by Candace Fleming, Harvard MBA, former HP Exec and small business President. Yet despite here credentials potential investors called her “Mom”, asked indiscreet questions and one invited her to his yacht by showing her his photo on the yacht – sans clothes.

“I didn’t know things like this still happened,” says Ms. Fleming, 37. “But I know that, especially in risky times like the last couple years, some investors kind of retreat to investing via a template.” A company owned by a woman, she adds, “is just not the standard template.”

Her solution was to find a fund that specifically focuses on investing in start-ups led by women: Golden Seeds. They and other angels funded Crimson Hexagon to the tune of $1.8M.

So while the bigger issue is still very much of a problem, at least all is well at Crimson Hexagon. That is, until you click the link, where you see this headline:

Crimson Hexagon, the leading provider of real time market research, today announced that it has filled a $2M Series A-2 funding round. The round, led by Golden Seeds, was completed through a combination of new and existing investors…

In addition, the company announced that Scott Centurino has joined the company as the new CEO, replacing Candace Fleming who left for both personal and professional reasons.

Oops… not exactly the outcome the NYT projected. So now you see why the title backfired: just who is out of the loop this time?

OMG, this must be Recurring Themes Day. Just done with the Your Blog is Your Resume theme (this one pops up about once a year with almost predictable regularity), and am now worried about Alexander Muse’s health. He’s a healthy strong man, but wants to shoot himself if he receives another NDA. He quotes Rick Segal (sorry, Rick for taking it verbatim, it’s just too entertaining…):

VC firms typically do not sign NDAs for first looks/meetings.

VC firms typically do not sign NDAs with promises not to evaluate the same or similar businesses included.

VC firms typically do not sign NDAs with 5 year no contact clauses included.

VC firms typically do not sign NDAs with promises to report any contact with competitive businesses included.

Rick is a Canadian VC, and his firm has received 35 NDA’s so far this year. But here’s the best part from his post:

Repeat this 10 times before you go to bed tonight:

I will not send an unsolicited beautiful leather bound binder with 600 hundred pages of detailed business, marketing, competitive, and financial information about my business along with an unsigned NDA and a request for it to be signed and returned to any VC.

It arrived in my office on Thursday and the binder was off the charts nice.

Don’t ever do it. Really. Just send the nice leather binder without all the crap. Unless you’ve discovered a new Conspiracy Theory (but you wouldn’t send that to a VC, would you?) don’t send hundreds of pages. Your page limit for first contact is one, perhaps two.

Back to the NDA theme, now that we’ve seen how VC’s hate them, let’s look at why startups shouldn’t bother about them anyway:

As an Entrepreneur it is often in your interest to share WHAT you do, as a way to solicit feedback, concept validation

If there is a “secret sauce” of HOW you will do it, you should not share it anyway, NDA or not – not until further down the road as part of due diligence with a committed investor

Since it’s commonly known that investors do not sign NDA’s, asking for it is akin to displaying a banner: “Newbie Here”

If the information you reveal during the presentation is enough for a competitor to jeopardize your position, than you really don’t have anything substantial to justify an investment. Your time would be better spent on product development.

Finally, a side-note to Alex (and all): RFP’s are also a waste of time. Extraordinary effort on formalities, and most RFP’s are issued as CYA, to cover up the fact that the prospective Customer already has a preferred vendor / solution provider. If you’re in the public sector, there’s no way around them, otherwise avoid RFP’s – there’s always other business to go after.